ISLAMABAD: Islamabad Chamber of Commerce and Industries (ICCI) has urged upon the State Bank of Pakistan (SBP) to extend access to finance for the Small and Medium Enterprises (SMEs) in order to strengthen SMEs and the domestic industrial sector.
"The banking sector should take measures to strengthen SMEs and the domestic industrial sector to stimulate the growth of trade and industry in the country as SMEs have been playing a key role in providing impetus to economic development," Mahfooz Elahi, President, ICCI, said in a statement issued here on Saturday.
He said that the government's borrowing from the central and commercial banks has touched Rs.2.999 trillion recorded at the end of fiscal year 2010-11.
"On the contrary, our banking sector has been practicing tight loan policy for private sector, which negatively impacted on economic activities that has already hit by bad law and order situation, and unavailability of particularly gas and electricity," he added.
The ICCI President said that SMEs sector should be given priority to make it as an effective tool for economic development and banks should not show reluctance in lending to SMEs and industries.
He said that banks should also ease out its strict conditions for financing to support industrial sector and small scale enterprises to survive.
He was of the view that banks credit to SMEs had declined from Rs.437 billion in 2007 to Rs.334 billion in Dec 2010, showing a huge decline in real terms.
He said that the future of banking industry in Pakistan was critically dependent on the strength and performance of the economy in which SME sector had attained a crucial role in terms of its growth potential and greater employment opportunities.
He cited the example of Taiwan, Korea, Hong Kong, China and countries in South America, who had been concentrating their efforts in developing the SME sector.
He said that banks should provide soft credits to SMEs and initiate special schemes, especially SPB should come up with concrete policies to support SMEs as these were considered the engine of economic growth and a vital source of social and economic stability.
Copyright APP (Associated Press of Pakistan), 2011
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